Key Provisions of the CLASS Act

There are currently more than 10 million Americans who rely on long-term care services and supports for their health and well-being. Many of the services allow people to age in place in their homes rather than institutional care. As the number of baby boomers age, the number of people with long-term community- based need swill only increase.

The U.S. has never had a system that ensures access to affordable and appropriate long-term care. Medicare, to many a surprise, does not provide long-term care to beneficiaries. (Although Medicare does cover care in a skilled nursing facility for up to 100 days following a hospitalization.) And while the new health reform bill provides opportunities for the states to expand and strengthen home and community- based programs in the Medicaid program, the major payer for long-term services, many boomers have income that exceeds Medicaid eligibility.

The CLASS program is a voluntary public insurance program for long-term care that lays the foundation for changing the rules on longterm care. The CLASS program starts in 2011 (the initial date to enroll has not been set). The program will be available to working adults after a five-year vesting period. After that, enrollees who need longterm care will be eligible for a daily cash benefit. The benefit can be used to pay for services and supports such as home modifications, that assist with continued community living.

The CLASS program will be fully financed by enrollee premiums. It provides a cash benefit. Benefit levels and premiums (to be developed by the U.S. Department of Health and Human Services) will vary by level of disability with a minimum of $50 a day. Premiums will vary by age at enrollment. Initial assessments indicate that, with an average benefit level of $75 a day, the program could be sustainable with monthly premiums that average $123.

Key Benefits:

• The CLASS program will • The program will not deny coverage or charge a higher premium based on health status, like private insurance can. It is a lifetime benefit, so it pays as long as you need it.
  
  
• A $75-a-day benefit translates to $27,000 a year. While that may not pay for all of the care someone needs, it can be a substantial contribution. The benefit will be adjusted to increase with inflation.
  
  
• The CLASS program will keep many people from spending their assets to the point of reaching Medicaid eligibility. The Congressional Budget Office estimates that the program could save more than $3 billion in Medicaid costs in the first 10-years.
  
  
• Private long-term care insurance is available in the individual health insurance market, but policies tend to have high premiums and limited benefits.
  
  
• With nursing home costs averaging more than $75,000 a year, and home care averaging about $20 an hour, many families deplete their resources and are forced to turn to Medicaid to pay for longterm care.
  
  
• These difficulties are not limited to frail seniors; 40 percent of the people who need long-term care are non-elderly individuals with serious disabling conditions
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  (Source: Families USA, April 2010; CBPP.org )